Performance Royalties

Today (June 26, 2015), the Recording Industry Association of America (RIAA) announced that satellite radio company SiriusXMhave settled a lawsuit brought by labels against the service for not paying royalties on older recordings.

The $210 million settlement is being touted as a win for labels, and potentially a resolution to an open legal question that has bedeviled the industry for a while now: whether recordings made before February 15, 1972 are eligible for royalties when “publicly performed” on digital radio. read more

Current copyright royalty formulas rest on a legal framework that dates back to the early part of last century, and “the time is ripe to question the existing paradigm,” U.S. Register of Copyrights Maria Pallante said in a 245-page February report on “Copyright and the Music Marketplace.”

The copyright board’s proceeding covers the bulk of payments to recording artists and labels made by Pandora and other digital music providers. By December, the board will decide Internet radio royalty rates through 2020.

Traditional AM and FM radio stations — such as KXMZ — are exempt from these royalties. read more

As expected, Apple announced its forthcoming music streaming service on Monday at its annual WorldWide Developers Conference. The service is scheduled to launch at the end of June, and naturally, our primary focus is on how the new offerings will impact musicians. The presentation was short on details, but here are some of the questions we’ve been wrestling with (and some partial answers)

Last month, SoundExchange announced that legendary musician David Byrne had joined their Board of Directors, filling the seat previously held by FMC co-founder Walter McDonough. In a statement, the acclaimed singer/songwriter/artist & writer said “I am honored to join the SoundExchange board where I can leverage my experience as a performing artist and fight on behalf of all creators for fairness and the long-term value of music.”read more

On May 29, 2015, Judge Lous Stanton of the Southern District Court of New York reached a decision in a dispute over rates paid by the webcaster Pandora to the performance rights organization (PRO) BMI. This court oversees rate-setting for songwriters and publishers when their works are “performed” on any form of radio (as well as live venues, bars and restaurants).

Judge Stanton’s ruling sets BMI’s new fee at 2.5 percent of revenue from Pandora, up from the previous 1.75—an increase of 43 percent. However, a separate judge from the same district court reached an entirely different decision about rates for Pandora and ASCAP (the other main PRO). In that ruling, from May 6, Judge Denise Coteheld rates at 1.85 percent.

On its surface, it looks like the judges presiding over each case simply have divergent views regarding what the rates should be. And this may be true, but there are additional factors to consider.

Yesterday, the U.S. District Court of Central California ruled in favor of Flo & Eddie, Inc., allowing for a class action lawsuit to proceed against Sirius XM. Flo & Eddie—original members of The Turtles—had already achieved a victory in their initial lawsuit against Sirius XM back in 2014. The latest ruling opens up the possibility of restitution for any artist whose music was recorded before February, 15 1972 and is played by the satellite radio giant. For Sirius XM, this could mean a great deal of money spent on appeals or settlements. We wonder whether the potential expense exceeds what they’d have paid if they hadn’t stopped compensating for pre-’72s.

As Judge Philip Gutierrez writes in his decision, “given SiriusXM’s aggressive litigation tactics … and its decision to continue to perform pre-1972 recordings without authorization, it may be cost-prohibitive for owners with smaller value claims to pursue their claims against SiriusXM in this environment.” We think it’s a positive when individual creators’ rights are recognized alongside those of the big media companies. A closer examination of the case, however, indicates that Flo & Eddie sued as copyright owners, not performers. We are unclear on what this might mean for the larger community of musicians who don’t own their copyrights but should be compensated for digital performances nonetheless.

As Congress prepares for a week-long break at the end of May, it’s a good time to review some recent developments. Last month, Rep. Anna G. Eshoo (D-CA) and Rep. Marsha Blackburn (R-TN) reintroduced their Protecting the Rights of Musicians Act (PRMA), which was originally introduced in May 2014. The bill’s main focus is ensuring that performers and record labels receive compensation for over-the-air play on AM/FM radio, something FMC has supported for over a decade. Currently a loophole in U.S. copyright law allows AM/FM radio broadcasters to circumvent the payment of royalties, while digital radio is still bound to pay everyone from performers and record labels to songwriters and publishers.

Yesterday, news broke that performance rights organization ASCAP lost its appeal of a decision by a federal judge to keep webcasting rates at 1.85 percent. The ruling also affirmed an earlier decision that publishers are not allowed to “partially withdraw” digital rights from ASCAP. This decision only applies to public performances of musical works on non-interactive (or “radio-like” services such as Pandora. (For more information on how all of this works, check out our ASCAP and BMI consent decrees fact sheet.) read more

Today brings news of a new coalition that has come together to advance specific perspectives around music licensing reform. The MIC Coalition is comprised of such companies and organizations as Amazon, NPR, the National Association of Broadcasters, the Hotel and Lodging Association, Google, the National Restaurant Association, Pandora, Digital Media Association, the Consumer Electronics Association, iHeartMedia and others. read more

WASHINGTON, DC— Today, Reps. Jerrold Nadler (D-NY), Marsha Blackburn (R-TN.), John Conyers Jr. (D-MI.), and Ted Deutch (D-FL.) introduced the Fair Play Fair Pay Act of 2015. Among other things, the bill would establish a public performance right for terrestrial radio, enabling musicians and sound recording owners to collect royalties when their music is played on AM/FM radio.